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Leading Judgment on family settlment

Before dealing with the respective contentions put forward by the parties, we would like to
discuss in general the effect and value of family arrangements entered into between the
parties with a view to resolving disputes once for all. By virtue of a family settlement or
arrangement members of a family descending from a common ancestor or a near relation
seek to sink their differences and disputes, settle and resolve their conflicting claims or
disputed titles once for all in order to buy peace of mind and bring about complete
harmony and goodwill in the family. The family arrangements are governed by a special
equity peculiar to themselves and would be enforced if honestly made. In this connection,
Kerr in his valuable treatise "Kerr on Fraud" at p. 364 makes the following pertinent
observations regarding the nature of the family arrangement which may be extracted thus;

"The principles which apply to the case of ordinary compromise


between strangers, do not equally apply to the case of compromises
in the nature of family arrangements. Family arrangements are
governed by a special equity peculiar to themselves, and will be
enforced if honesty made, although they have not been meant as a
compromise, but have proceeded from an error of all parties,
originating in mistake or ignorance of fact as to that their rights
actually are, or of the points On which their rights actually depend."

The object of the arrangement is to protect the family from long drawn litigation cr
perpetual strifes which mar the unity and solidarity of the family and create hatred and bad
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blood between the various members of the family. Today when we are striving to build up
an egalitarian society and are trying for a complete reconstruction of the society, to
maintain and uphold the unity and homogeneity of the family which ultimately results in
the unification of the society and, therefore, of the entire country, is the prime need of the
hour. A family arrangement by which the property is equitably divided between the various
contenders so as to achieve an equal distribution of wealth instead of concentrating the
same in the hands of a few is undoubtedly a milestone in the administrating of social
justice. That is why the term "family" has to be understood in a wider sense so as to
include within its fold not only close relations or legal heirs but even those persons who
may have some sort of antecedent title, a semblance of a claim or even if they have a
spes successions so that future disputes are sealed for ever and the family instead of
fighting claims inter se and wasting time, money and energy on such fruitless or futile
litigation is able to devote its attention to more constructive work in the larger interest of
the country. The Courts have, therefore, leaned in favour of upholding a family
arrangement instead of disturbing the same on technical or trivial grounds. Where the
Courts find that the family arrangement suffers from a legal lacuna or a formal
defect the rule of estoppel is pressed into service and is applied to shut out plea of
the person who being a party to family arrangement seeks to unsettle a settled
dispute and claims to revoke the family arrangement under which he has himself
enjoyed some material benefits. The law in England on this point is almost the same. In
Halsbury's Laws of England, Vol. 17, Third Edition, at pp. 215-216, the following apt
observations regarding the essentials of the family settlement and the principles
governing the existence of the same are made:

"A family arrangement is an agreement between members of the same


family, intended to be generally and reasonably for the benefit of the family
either by compromising doubtful or disputed rights or by preserving the
family property or the peace and security of the family by avoiding litigation
or by saving-its honour.

The agreement may be implied from a long course. Of dealing, but it is


more usual to embody or to effectuate the agreement in a deed to which
the term "family arrangement" is applied.

Family arrangements are governed by principles which are not


applicable to dealings between strangers. The court, when deciding the
rights of parties under family arrangements or claims to upset such
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arrangements, considers what in the broadest view of the matter is most


for the interest of families, and has regard to considerations which in
dealing with transactions between persons not members of the same
family, would not be taken into account. Matters which would be fatal to
the validity of similar transactions between strangers are not
objections- to the binding effect of family arrangements".

In other words to put the binding effect and the essentials of a family settlement in a
concretised form, the matter may be reduced into the form of the following propositions:

(1) The family settlement must be a bona fide one so as to resolve family
disputes and rival claims by a fair and equitable division or allotment of
properties between the various members of the family;

(2) The said settlement must be voluntary and should not be induced by
fraud, coercion or undue influence:

(3) The family arrangement may be even oral in which case no registration
is necessary; (4) It is well-settled that registration would be necessary only
if the terms of the family arrangement are reduced into writing. Here also, a
distinction should be made between a document containing the terms and
recitals of a family arrangement made under the document and a mere
memorandum pre pared after the family arrangement had already been
made either for the purpose of the record or for in formation of the court for
making necessary mutation. In such a case the memorandum itself does
not create or extinguish any rights in immovable properties and therefore
does not fall within the mischief of s. 17(2) of the Registration Act and is,
therefore, not compulsorily registrable;

(5) The members who may be parties to the family arrangement must have
some antecedent title, claim or interest even a possible claim in the
property 'It which is acknowledged by the parties to the settlement. Even if
one of the parties to the settlement has no title but under the arrangement
the other party relinquishes all its claims or titles in favour of such a person
and acknowledges him to be the sole 9 owner, then the antecedent title
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must be assumed and the family arrangement will be upheld and the
Courts will find no difficulty in giving assent to the same;

(6) Even if bona fide disputes, present or possible, which may not involve
legal claims are settled by a bona fide family arrangement which is fair and
equitable the family arrangement is final and binding on the parties to the
settlement.

Supreme Court of India


Kale & Others vs Deputy Director Of Consolidation ... on 21 January, 1976
Equivalent citations: 1976 AIR 807, 1976 SCR (2) 202,(1976)3SCC119
Hon'ble Judges/Coram:
R.S. Sarkaria, S. Murtaza Fazal Ali and V.R. Krishna Iyer, JJ.

Appeal by special leave from the judgment and order dated 17-5-1966 of the Allahabad
High Court in Special Appeal No. 640 of 1965.
R. K. Garg, S. C. Agrawala and V. J. Francis, for the appellants.
B. D. Sharma, for respondents Nos. 4 and S The Judgment of V. R. Krishna Iyer and S.
Muataza Fazal Ali JJ. was delivered by Fazal Ali, J. R. S. Sarkaria, J. gave a separate
opinion.
FAZAL ALI J. This is an appeal by special leave against the judgment of the Allahabad
High Court dated May 17, 1966 by which the appeal against the decision of a Single
Judge of the High Court rejecting the writ petition of the appellants had been dismissed.
An application for granting a certificate for leave to appeal to this Court was made by the
appellant before the High Court which was also dismissed by order of the High Court
dated August , 1967.
The case had a rather chequered career and the disputes between the parties were
sometimes settled and sometimes reopened. In order, however, to understand the point
involved in the present appeal, it may be necessary to enter into the domain of the
contending claims of the respective parties put forward before the Revenue Courts from
time to time. To begin with the admitted position is that one Lachman the last propitiator
was the tenant and the tenure holder of the property in dispute which consists of 19.73
acres of land contained in Khatas Nos. 5 & 90 and 19.4 acres of land comprising Khatas
Nos. 53 & 204. Lachman died in the year 1948 leaving behind three daughters, namely,
Musamat Tikia, Musamat Har Pyari and Musamat Ram Pyari. Musamat Tikia was married
during the life time of Lachman and the appellant No. 1 Kale is the son of Musamat Tikia.
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Thus it would appear that after the death of Lachman the family consisted of his two
unmarried daughters Har Pyari and Ram Pyari and his married daughter's son Kale.
Under the U.P. Tenancy Act, 1939 which applied to the parties only unmarried daughters
inherit the property. The first round of dispute appears to have arisen soon after the death
of Lachman in the year 1949 when Panchayat Adalat of the village was asked to decide
the dispute between Prem Pal nephew of Lachman and the appellant Kale regarding
inheritance to the property left by Lachman. Har Pyari and Ram Pyari appear to have
been parties to that dispute and the Panchayat Adalat after making local enquiries held
that Har Pyari having been married had lost her right in the estate and Ram Pyari was
also an heir so long as she was not married and after her marriage the legal heir to the
property of Lachman would be the appellant Kale. In the year 1952 the U.P. Zamindari
Abolition and Land Reforms Act, 1950 was made applicable to the tenure holders
also. This Act was further amended on October 10, 1954 by Act 20 of 1954 by which,
amongst the list of heirs enumerated under the statute, "unmarried daughter" was
substituted by ''daughter'' only. According to the appellant in this Court as also in the High
Court Ram Pyari respondent No. S was married on February 25, 1955 and thereafter the
appellant filed a petition before the Naib Tahsildar, Hasanpur, for expunging the names of
respondents 4 and 5 from the disputed Khatas because both of the daughters having
been married ceased to have any interest in the property. lt was therefore prayed that the
appellant was the sole heir to the estate of Lachman under s. 3 of the U.P. Tenancy Act,
1939, he alone should be mutated in respect of the`property of Lachman. By order dated
December S, 1955 the Naib Tahsildar, Hasaknpur, accepted the contention of the
appellant and expunged the names of respondents 4 & 5 from the Khatas in dispute and
substituted the name of the appellant Kale. Soon thereafter on January 11, 1956,
respondents 4 & 5, i.e. Musamat Har Pyari and Ram Pyari daughters of Lachman, filed an
application before the Naib Tahsildar for setting aside his order dated December 5, 1955
which had been passed behind their back and without their knowledge. While this
application of respondents 4 & 5 was pending adjudication the Revenue Court was
informed that talk of compromise was going on between the parties which ultimately
culminated in a compromise or a family arrangement under which the appellant Kale was
allotted, Khatas Nos. 5 90 whereas respondents 4 & 5 were allotted Khatas No. 53 & 204
as between them. A petition was filed on August 7, 1956 before the Revenue Court
informing it that compromise had been arrived at and in pursuance thereof the name of
the parties may be mutated in respect of the khatas which had been allotted to them. This
petition was signed by both the parties and ultimately the Assistant Commissioner, 1
Class, passed an order dated March 31, 1957 mutating the name of the appellant Kale in
respect of Khatas Nos. 5 & 90 and the names of respondents 4 & 5 in respect of Khatas
Nos. 53 and
204. Thereafter it is not disputed that the parties remained in possession of the properties
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allotted to them and paid land revenue to the Government. Thus it would appear that the
dispute between the parties was finally settled and both the parties accepted the same
and that benefit thereunder. This state of affairs continued until the year 1964 when
proceedings for revision of the records under s. 8 of the U.P. Consolidation of holdings
Act, 1953 were started in the village Hasanpur where the properties were situated in the
course of which respondents 4 & 5 were entered in Form C.H. 5 as persons claiming cotenure holders to the extent of 2/3rd share with the appellant Kale who was entered in the
said form as having 1/3rd share in all the Khatas. In view of this sudden change of the
entries which were obviously contrary to the mutation made in pursuance of the family
arrangement entered into between the parties in 1956, the appellant Kale filed his
objections before the Assistant Consolidation officer for changing the entries in respect of
those Khatas. As the Assistant Consolidation officer found that the dispute was a
complicated one he by his order dated May 7, 1964 referred the matter to the
Consolidation officer. It might be mentioned here that when the proceedings for revision of
the records were started, while the appellant filed his objections, respondents 4 & 5 seem
to have kept quiet and filed no objections at all. In fact under s. 9 (2) of the U. P.
Consolidation of Holdings Act, 1953, the respondents could have filed their objections, if
they were aggrieved by the entries made on the basis of the compromise. Sub-section (2)
of s. 9 of the U.P. Consolidation of Holdings Act runs thus:

"Any person to whom a notice under sub-section (1) has been sent, or any
other person interested may, within 21 days of the receipt of notice, or of
the publication under sub-section (1), as the case may be, file, before the
Assistant Consolidation officer, objections in respect thereof disputing the
correctness or nature of the entries in the re cords or in the extract
furnished therefrom, or in the Statement of Principles, or the need for
partition."

This is a very important circumstance which speaks volumes against the conduct of the
respondents which will be referred to in detail in a later part of our judgment and seems to
have been completely brushed aside by all the Courts.
The Consolidation officer to whom the dispute was referred, by his order dated July 27,
1964, framed a number of issues, and after trying the suit, removed the name of the
appellant Kale from Khatas 5 & 90 and substituted the names of appellant No. 2 Musamat
Tikia and those of respondents 4 & 5. We might also mention here that for the first time
respondents 4 & 5 raised a dispute before the Consolidation officer denying that the
appellant Kale was the grandson of Lachman. The Consolidation officer framed an issue
on this question and after taking evidence clearly found that the objection raised by
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respondents 4 & 5 was absolutely groundless and that the appellant Kale was
undoubtedly the grandson of Lachman. The Consolidation officer pointed out that even
before the Panchayat Adalat as also in the mutation petition which was filed before the
Naib Tahsildar respondents 4 & 5 never disputed that the appellant Kale was the
grandson of Lachman being the son of his daughter Musamat Tikia who is appellant No.
2.
Thereafter the appellant and the respondents 4 & 5 filed an appeal before the Settlement
officer who by his order dated November 28, 1964, restored the mutation made by the
Naib Tahsildar on the basis of the compromise, namely the appellant was mutated in
respect of Khatas Nos. 5 & 90 and respondents 4 & 5 in respect of Khatas Nos. 53 & 204.
Thereafter respondents 4 & 5 filed a revision petition before the Deputy Director of
Consolidation who by his order dated January 22, 1965, reversed the order of the
Settlement officer and expunged the name of the appellant Kale from Khatas Nos. S & 90
and recorded the name of respondent No. 5 Musamat Ram Pyari in respect of these
Khatas on the ground that she was the sole tenure holder in respect of those Khatas.
Thereafter the appellant Kale and his mother Musama Tikia appellant No. 2 filed a writ
petition in the Allahabad High Court against the order of the Deputy Director of
Consolidation. The writ petition was heard in the first instance by a Single Judge who
dismissed the petition upholding the order of the Deputy Director of Consolidation The
appellant then filed a special appeal to the Division Bench of the Allahabad High Court
which also affirmed the judgment of the Single Judge and dismissed the appeal-hence
this appeal by special leave.
In support of the appeal Mr. Garg appearing for the appellants submitted two points of law
before us. In the first place he argued that the grounds on which the Courts below have
not given effect to the family arrangement arrived at between the parties in 1956
culminating in the mutation in 1957 are not legally sustainable. The High Court took an
erroneous view of the law in rejecting the compromise on the ground that it was not
registered. It was argued that an oral family arrangement had already taken place earlier
and application before the Naib Tahsildar was merely for the information of the Court for
the purpose of mutation of the names of the parties in pursuance of the compromise and,
therefore, no question of registration of the compromise in this case arose. Secondly it
was contended that even if the compromise was unregistered it would undoubtedly
operate as a clear estoppel against the respondents 4 & 5 who having taken benefit
thereunder and having remained in possession of the lands for E more than seven years
cannot be allowed to revoke the compromise.
Mr. Sharma learned counsel appearing for the respondents raised the following
contentions before us:

(1) that the appellants never pleaded any oral family arrangement;
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(2) that the family arrangement relied upon by the appellants was not bona
fide and was fraudulent as the on sent of respondents 4 & 5 was obtained
by fraud or` undue influence; (3) that the appellants themselves gave a
complete go bye to the family arrangement in the case which they made
out before the Revenue Courts and have merely taken advantage of a
stray observation made by the Deputy Director of Consolidation;

(4) that the petition filed before the Naib Tahsildar embodied and as such
the terms and conditions of the compromise was compulsorily registrable
under the Registration Act, and being unregistered it was inadmissible in
evidence;

(5) that at any rate the family arrangement was not proved by the
appellants as a fact;

(6) that the doctrine of estoppel would not apply because the family
arrangement being compulsorily registrable there can be no estoppel
against the statute; and (7) that the findings of the Revenue Courts being
essentially findings of fact, this Court would not interfere, unless there was
a sufficient error of law apparent on the face of the record.

Before dealing with the respective contentions put forward by the parties, we would like to
discuss in general the effect and value of family arrangements entered into between the
parties with a view to resolving disputes once for all. By virtue of a family settlement or
arrangement members of a family descending from a common ancestor or a near relation
seek to sink their differences and disputes, settle and resolve their conflicting claims or
disputed titles once for all in order to buy peace of mind and bring about complete
harmony and goodwill in the family. The family arrangements are governed by a special
equity peculiar to themselves and would be enforced if honestly made. In this connection,
Kerr in his valuable treatise "Kerr on Fraud" at p. 364 makes the following pertinent
observations regarding the nature of the family arrangement which may be extracted thus;

"The principles which apply to the case of ordinary compromise between


strangers, do not equally apply to the case of compromises in the nature of
family arrangements. Family arrangements are governed by a special
8/31

equity peculiar to themselves, and will be enforced if honesty made,


although they have not been meant as a compromise, but have proceeded
from an error of all parties, originating in mistake or ignorance of fact as to
that their rights actually are, or of the points On which their rights actually
depend."

The object of the arrangement is to protect the family from long drawn litigation cr
perpetual strifes which mar the unity and solidarity of the family and create hatred and bad
blood between the various members of the family. Today when we are striving to build up
an egalitarian society and are trying for a complete reconstruction of the society, to
maintain and uphold the unity and homogeneity of the family which ultimately results in
the unification of the society and, therefore, of the entire country, is the prime need of the
hour. A family arrangement by which the property is equitably divided between the various
contenders so as to achieve an equal distribution of wealth instead of concentrating the
same in the hands of a few is undoubtedly a milestone in the administrating of social
justice. That is why the term "family" has to be understood in a wider sense so as to
include within its fold not only close relations or legal heirs but even those persons who
may have some sort of antecedent title, a semblance of a claim or even if they have a
spes successions so that future disputes are sealed for ever and the family instead of
fighting claims inter se and wasting time, money and energy on such fruitless or futile
litigation is able to devote its attention to more constructive work in the larger interest of
the country. The Courts have, therefore, leaned in favour of upholding a family
arrangement instead of disturbing the same on technical or trivial grounds. Where the
Courts find that the family arrangement suffers from a legal lacuna or a formal defect the
rule of estoppel is pressed into service and is applied to shut out plea of the person who
being a party to family arrangement seeks to unsettle a settled dispute and claims to
revoke the family arrangement under which he has himself enjoyed some material
benefits. The law in England on this point is almost the same. In Halsbury's Laws of
England, Vol. 17, Third Edition, at pp. 215-216, the following apt observations regarding
the essentials of the family settlement and the principles governing the existence of the
same are made:

"A family arrangement is an agreement between members of the same


family, intended to be generally and reasonably for the benefit of the family
either by compromising doubtful or disputed rights or by preserving the
family property or the peace and security of the family by avoiding litigation
or by saving-its honour.
9/31

The agreement may be implied from a long course. Of dealing, but it is


more usual to embody or to effectuate the agreement in a deed to which
the term "family arrangement" is applied.

Family arrangements are governed by principles which are not applicable


to dealings between strangers. The court, when deciding the rights of
parties under family arrangements or claims to upset such arrangements,
considers what in the broadest view of the matter is most for the interest of
families, and has regard to considerations which in dealing with
transactions between persons not members of the same family, would not
be taken into account. Matters which would be fatal to the validity of similar
transactions between strangers are not objections- to the binding effect of
family arrangements".

In other words to put the binding effect and the essentials of a family settlement in a
concretised form, the matter may be reduced into the form of the following propositions:

(1) The family settlement must be a bona fide one so as to resolve family
disputes and rival claims by a fair and equitable division or allotment of
properties between the various members of the family;

(2) The said settlement must be voluntary and should not be induced by
fraud, coercion or undue influence:

(3) The family arrangement may be even oral in which case no registration
is necessary; (4) It is well-settled that registration would be necessary only
if the terms of the family arrangement are reduced into writing. Here also, a
distinction should be made between a document containing the terms and
recitals of a family arrangement made under the document and a mere
memorandum pre pared after the family arrangement had already been
made either for the purpose of the record or for in formation of the court for
making necessary mutation. In such a case the memorandum itself does
not create or extinguish any rights in immovable properties and therefore
does not fall within the mischief of s. 17(2) of the Registration Act and is,
therefore, not compulsorily registrable;
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(5) The members who may be parties to the family arrangement must have
some antecedent title, claim or interest even a possible claim in the
property 'It which is acknowledged by the parties to the settlement. Even if
one of the parties to the settlement has no title but under the arrangement
the other party relinquishes all its claims or titles in favour of such a person
and acknowledges him to be the sole 9 owner, then the antecedent title
must be assumed and the family arrangement will be upheld and the
Courts will find no difficulty in giving assent to the same;

(6) Even if bona fide disputes, present or possible, which may not involve
legal claims are settled by a bona fide family arrangement which is fair and
equitable the family arrangement is final and binding on the parties to the
settlement.

The principles indicated above have been clearly enunciated and adroitly adumbrated in a
long course of decisions of this Court as also those of the Privy Council and other High
Courts, which we shall discuss presently.
In Lala Khunni Lal & Ors. v. Kunwar Gobind Krishna Narain and Anr.(1) the statement of
law regarding the essentials of a valid settlement was fully approved of by their Lordships
of the Privy Council. In this connection the High Court made the following observations ,
which were adopted by the Privy Council:

The learned judges say as follows:

"The true character of the transaction appears to us to have been a


settlement between the several members of the family of their disputes,
each one relinquishing all claim in respect of all property in dispute other
than that falling to his share, and recognizing the right of the others as they
had previously asserted it to the portion allotted to them respectively. It was
in this light, rather than as conferring - a new distinct title on each other,
that the parties themselves seem to have regarded the arrangement, and
we think that (1) L. R. 38 T. A. 87. 102.

it is the duty of the Courts to uphold and give full effect to such an
arrangement."
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Their Lordships have no hesitation in adopting that view."


This decision was fully endorsed by a later decision of the Privy Council in Mt. Hiran Bibi
and others v. Mt. Sohan Bipi(1).
In Sahu Madho Das and others v. Pandit Mukand Ram and another(2) this Court appears
to have amplified the doctrine of validity of the family arrangement to the farthest possible
extent, where Bose, J., speaking for the Court, observed as follows:

"It is well settled that compromise or family arrangement is based on the


assumption that there is an antecedent title of some sort in the parties and
the agreement acknowledges and defines what that title is, each party
relinquishing all claims to property other than that falling to his share and
recognising the right of the others, as they had previously asserted it, to the
portions allotted to them respectively. That explains why no conveyance is
required in these cases to pass the title from the one in whom it resides to
the person receiving it under the family arrangement. It is assumed that the
title claimed by the person receiving the property `, under the arrangement
had always resided in him or her so far as the property falling to his or her
share is concerned and therefore no conveyance is necessary. But, in our
opinion, the principle can be carried further and so strongly do the Courts
lean in favour of family arrangements that bring about harmony in a family
and do justice to its various members- and avoid in anticipation, future
disputes which might ruin them all, and we have no hesitation in taking the
next step. (fraud apart) and upholding an arrangement under which. One
set of members abandons all claim to all title and interest in all the
properties in dispute and acknowledges that the sole and absolute title to
all the properties resides in only one of their number (provided he or she
had claimed the whole and made such an assertion of title) and are content
to take such properties as are assigned to their shares as gifts pure and,
simple from him or her, or as a conveyance for consideration when
consideration is present."

In Ram Charan. DAS v. Girjanandini Devi & Ors. (3), this Court observed as follows:

"Courts give effect to a family settlement upon the broad " and general
ground that its object is to settle existing or future disputes regarding
property amongst members of a family. The word 'family' in the content is
not to be under stood in a narrow sense of being a group of persons who
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are recognised in law as having a right of succession or (1) A.I.R. 1914


P.C.44. (2) [1955] 2 S.C.R. 22, 42-43. (3) [1965] 3 S.C.R. 841, 850-851.

having a claim to a share in the property in dispute. . . . . . . . The


consideration for such a settlement, if one may put it that way, is the
expectation that such a settlement will result in establishing or ensuring
amity and goodwill amongst persons bearing relationship with one another.
That consideration having been passed by each of the disputants the
settlement consisting of recognition of the right asserted by each other
cannot be permitted to be impeached thereafter."

In Tek Bahadur Bhujil v. Debi Singh Bhujil and others(1) it was pointed out by this Court
that a family arrangement could be arrived 4 at even orally and registration would be
required only if it was reduced into writing. It was also held that a document which was no
more than a memorandum of what had been agreed , to did not require registration. This
Court had observed thus:

"Family arrangement as such can be arrived at orally. Its terms may be


recorded in writing as a memorandum of what had been agreed upon
between the parties. The memorandum need not be prepared for the
purpose of being used as a document on which future title of the parties be
founded. It is usually prepared as a record of what had been agreed upon
so that there be no hazy notions about it in future. It is only when the
parties reduce the family arrangement in writing with the purpose of using
that writing as proof of what they had arranged and, where the
arrangement is brought about by the document as such, that the document
would require registration as it is then that it would be a document of title
declaring for future what rights f in what properties the parties possess."

Similarly in Maturi Pullaiah and Anr. v. Maturi Narasimham and ors.(2) it was held that
even if there was no conflict of legal claims but the settlement was a bona fide one it could
be sustained by the Court. Similarly it has also held that even the disputes based upon
ignorance of the parties as to their rights were sufficient to sustain the family arrangement.
In this connection this Court observed as follows: -

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"It will be seen from the said passage that a family arrangement resolves
family disputes, and that even disputes based upon ignorance of parties as
to their rights may afford a sufficient ground to sustain it.

* * * * * Briefly stated, though conflict of legal claims in praesenti or in future


is generally a condition for the validity of a family arrangement, it is not
necessarily so. Even bona fide disputes, present or possible, which may
not involve legal claims will suffice. Members of a joint Hindu family may, to
maintain peace or to bring about harmony in the family, (1) A.I.R. 1966 S.C.
292, 295. (2) A.I.R. 1966 S.C.

1836.

enter into such a family arrangement. If such an arrangement is entered


into bona fide and the terms thereof are fair in the circumstances of a
particular case, Courts `will . more readily give assent to such an
arrangement than to avoid it."

In Krishna Biharilal v. Gulabchand and others(1) it was pointed out that the word 'family'
had a very wide connotation and could not be confined only to a group of persons who
were recognised by law as having a right of succession or claiming to have a share. The
Court then observed:

"To consider a settlement as a family arrangement, it is not necessary that


the parties to the compromise should all , belong to one family. As
observed by this Court in Ram Charan Das v. Girjanandini Devi and ors.
[1965] 3 SCR 841 at pp. 850 & 851-the word "family" in the context of a
family arrangement is not to be understood in a narrow sense of being a
group of persons who are recognised in law as having a right of succession
or having a claim to a share in the property in dispute. If the dispute which
is settled is one between near relations then the settlement of such a
dispute can be considered as a family arrangement see Ramcharan Das's
case.

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The courts lean strongly in favour of family arrangements to bring about


harmony in a family and do Justice to its various members and avoid in
anticipation future disputes which might ruin them all."

In a recent decision of this Court in S. Shanmugam Pillai and others v. K. Shanmugam


Pillai & others(2) the entire case law was discussed and the Court observed as follows:

"If in the interest of the family properties or family peace the close relations
had settled their disputes amicably, this Court will be reluctant to disturb
the same. The courts generally lean in favour of family arrangements.

* * * * Now turning to the plea of family arrangement, as observed by this


Court in Sahu Madho Das and others v Pandit Mukand Ram and Another
[1955] 2 SCR 22 the courts lean strongly in favour of family arrangements
that bring about harmony in a family and do justice to its various members
and avoid, in anticipation, future disputes which might ruin them all. As
observed in that case the family arrangement can as a matter of law be
inferred from a long course of dealings between the parties.

In Maturi Pullaiah and Another v. Maturi Narasimham and Others- AIR


1966 SC 1836 this Court held that although conflict of legal claims in
praesenti or in future is (1) [1971] Supp. SCR 27, 34. (2) [1973] 2 SCC
312.

generally condition for the validity of family arrangements, it is not


necessarily so. Even bona fide dispute present or possible, which may not
involve legal claims would be sufficient. Members of a joint Hindu family
may to maintain peace or to bring about harmony in the family, enter into
such a family arrangement. If such an agreement is entered into bona fide
and the terms thereto are fair in the circumstances of a particular case, the
courts would more readily give assent to such an agreement than to avoid
it."

Thus it would appear from a review of the decisions analysed above that the Courts have
15/31

taken a very liberal and broad view of the validity of the family settlement and have always
tried to uphold it and maintain it. The central idea in the approach made by the Courts is
that if by consent of parties a matter has been settled, it should not be allowed to be reopened by the parties to the agreement on frivolous or untenable grounds.
A full bench of the Allahabad High Court in Ramgopal v. Tulshi Ram and another(1) has
also taken the view that a family arrangement could be oral and if it is followed by a
petition in Court containing a reference to the arrangement and if the purpose was merely
to inform the Court regarding the arrangement, no registration was necessary. In this
connection the full bench adumbrated the following propositions in answering the
reference:

" We would, therefore return the reference with a statement of the following
general propositions: With reference to the first question: (1) A family
arrangement can be made orally. (2) If made orally, there being no
document, no question of registration arises.

With reference to the second question: (3)If though it could have been
made orally, it was in fact reduced to the form of a "document", registration
(when the value is Rs. 100 and upwards) is necessary.

(4) Whether the terms have been "reduced to the form of a document" is a
question of fact in each case to be determined upon a consideration of the
nature and phraseology of the writing and the circumstances in which and
the purpose with which it was written.

(5) If the terms were not "reduced to the form of a document", registration was not
necessary (even though the value is Rs. 100 or upwards); and, while the writing cannot be
used as a piece of evidence for what it may be worth, e.g. as corroborative of other
evidence or as an admission of the transaction or as showing or explaining conduct.
(1) AIR 1928 All. 641, 649.
(6) If the terms were "reduced to the form of a document" and, though the value was Rs.
100 or upwards, it was not registered, the absence of registration makes the document
inadmissible in evidence and is fatal to proof of the arrangement embodied in the
document."
Similarly in Sitala Baksh Singh and others v. Jang Bahadur Singh and other (1) it was held
that where a Revenue Court merely gave effect to the compromise, the order of the
16/31

Revenue Court did not require registration. In this connection the following observations '
were made:

"In view of this statement in para 5 of the plaint it is hardly open to the
plaintiffs now to urge that Ex. 1, the com promise, required registration
when they themselves admit that it was embodied in an order of the
Revenue Court and that it was given effect to by the Revenue Court
ordering mutation in accordance with the terms of the compromise. * * * *
We hold that as the Revenue Court by its proceeding gave effect to this
compromise, the proceedings and orders of the Revenue Court did not
require registration."

Similarly in a later decision of the same Court in Mst. Kalawati v. Sri Krlshna Prasad and
others(2) it was observed as follows:

"Applying this meaning to the facts of the present case, it seems to us that
the order of the mutation court merely stated the fact of the compromise
having been arrived at between the parties and did not amount to a
declaration of will. The order itself did not cause a change of legal relation
to the property and therefore it did not declare any right in the property."

The same view was taken in Bakhtawar v. Sunder Lal and others(3), where Lindsay, J.,
speaking for the Division Bench observed as follows:

"It is reasonable to assume that there was a bona fide dispute between the
parties which was eventually composed each party recognizing an
antecedent title in the other. I this view of the circumstances I am of opinion
that there was no necessity to have this petition registered. It does not in
my opinion purpose to create, assign, limit, extinguish or declare within the
meaning of these expressions as used in S. 17(1)(b)of the Registration Act.
It is merely a recital of fact by which the Court is informed that the parties
have come to an arrangement."

Similarly the Patna High Court in Awadh Narain Singh and others v. Narain Mishra and
17/31

others(4) pointed out that a compromise petition not embodying any terms of agreement
but merely conveying in formation to the Court that family arrangement had already been
(1) A.I.R 1933 Oudh 347, 348-349. (2) I.L.R. 19 Lucknow 57, 67.
(3) A.I.R. 1926 All. 173. 175. (4) AIR 1962 Patna
400. 15-390SCI/76 arrived at between the parties did not require registration and can be
looked into for ascertaining the terms of family arrangement. This is what actually seems
to have happened in the present case when the mutation petition was made before the
Assistant Commissioner.
This Court has also clearly laid down that a family arrangement being binding on the
parties to the arrangement clearly operates as an estoppel so as to preclude any of the
parties who have taken advantage under the agreement from revoking or challenging the
same. We shall deal with this point a little later when we consider the arguments of the
respondents on the question of the estoppel. In the light of the decisions indicated above,
we shall now try to apply the principles laid down by this Court and the other Courts to the
facts of the present case.
It would be seen that when the name of appellant No. 1 Kale was mutated in respect of
the Khatas by the Naib Tehsildar by his order dated December 5, 1955 which is
mentioned at p. 4 of the Paper Book respondents 4 & 5 filed an application for setting
aside that order on the ground that they had no knowledge of the proceedings.
Subsequently a compromise was entered into between the parties a reference to which
was made in the compromise petition filed before the Revenue Court on August 7, 1956. A
perusal of this compromise petition which appears at pp. 15 to 18 of the Paper Book
would clearly show two things-(1) that the petition clearly and explicitly mentioned that a
compromise had already been made earlier, and (2) that after the allotment of the Khatas
to the respective parties the parties shall be permanent owners thereof. The opening
words of the petition may be extracted thus:
"It is submitted that in the above suit a compromise has been made mutually between the
parties." It would appear from the order of the Assistant Commissioner, 1st Class, being
Annexure 4 in Writ Petition before the High Court, appearing at p. 19 of the Paper Book
that the parties sought adjournment from the Court on the ground that a compromise was
being made. In this connection the Assistant Commissioner, Ist Class, observed as
follows:

"On 11th January 1956 Mst. Har Piari and Ram Piari gave an application
for restoration in the court of Naib Tahsildar on the ground that they were
not informed of the case and they were aggrieved of his order passed on
5th December 1955. On this application he summoned the parties and an
objection was filed against the restoration application. The parties sought
adjournment on the ground that a compromise was being made.
18/31

The parties filed compromise before the Naib Tehsildar according to which
two lists were drawn, one of these is to be entered in the name of. Kale
and the other in the name of Har Piari and Ram Piari."

This shows that even before the petition was filed before the Assistant commissioner
informing him that a compromise was being made, The parties had a clear compromise or
a family arrangement in contemplation for which purpose an adjournment was taken.
These facts coupled together unmistakably show that the compromise or family
arrangement must have taken place orally before the petition was filed before the
Assistant Commissioner for mutation of the names of the parties in pursuance of the
compromise. The facts of the present case are '` therefore clearly covered by the
authorities of this Court and the other , . High Courts which laid down that a document
which is in the nature of a memorandum of an earlier family arrangement and which is
filed before the Court for its information for mutation of names is not compulsorily
registrable and therefor can be used in evidence of the family arrangement and is final
and binding on the parties. The Deputy Director of Consolidation respondent No. 1 as also
the High Court were, therefore, wrong in taking the view that in absence of registration the
family arrangement could not be sustained. We might mention here that in taking this
view, the High Court of Allahabad completely over looked its own previous decisions on
this point which were definitely binding on it. This, therefore, disposes of the first
contention of the learned counsel for the respondents that as the family arrangement
having been reduced into the form of a document which was presented before the
Assistant Commissioner was unregistered it is not admissible and should be excluded
from consideration.
It was then contended by the respondents that the family arrangement was not bona fide
for two reasons:

(1) that it sought to give property to the appellant No. 1 Kale who was not a
legal heir to the estate of Lachman, because in view of the U.P. Land
Reforms (Amendment) Act 20 of 1954 Mst. Ram Piari even after being
married could ? retain the property, and so long as she was there the
appellant had no right; and

(2) that the family arrangement was brought about by fraud or undue
19/31

influence.

As regards the first point it appears to us to be wholly untenable in law. From the
principles enunciated by us and the case law discussed above, it is absolutely clear that
the word 'family' cannot he construed in a narrow sense so as to confine the parties to the
family arrangement only to persons who have a legal title to the property. Even so it
cannot be disputed that the appellant Kale being the grand son of Lachman and therefore
a reversioner at the time when the talks for compromise` took place was undoubtedly a
prospective heir and also a member of the family. Since respondents 4 & 5 relinquished
their claims in favour of the appellant Kale in respect of Khatas 5 & 90 the appellant,
according to the authorities mentioned above, would be deemed to have antecedent title
which was acknowledged by respondents 4 & 5. Apart from this there is one more
important consideration , which clearly shows that the family arrangement was
undoubtedly a bona fide settlement of disputes. Under the family arrangement as referred
to in the mutation petition the respondents 4 & 5 were given absolute and permanent
rights in the lands in dispute. In 1955 when the compromise is alleged to have taken place
the Hindu Succession Act, 1956, was not passed and respondents 4 & 5 would have only
a limited interest even if they had got the entire property which would ultimately pass to
the appellant Kale after their death. The respondents 4 & 5 thought that it would be a
good bargain if by dividing the properties equally they could retain part of the properties
as absolute owners. At that time they did not know that the Hindu Succession p Act would
be passed a few months later. Finally the compromise sought to divide the properties
between the children of Lachman, namely, his two daughters and his daughter's son the
appellant Kale in equal shares and was, therefore, both fair and equitable. In fact if
respondents 4 & 5 would have got all the lands the total area of which would be
somewhere about 39 acres they might have to give away a substantial portion in view of
the ceiling law. We have, therefore to see the circumstances prevailing not after the order
of the Assistant Commissioner was passed on the mutation petition but at the time when
the parties sat down together to iron out their differences. Having regard to the
circumstances indicated above, we cannot conceive of a " more just and equitable division
of the properties than what appears to have been done by the family arrangement. In
these circumstances therefore, it cannot be said that the family settlement was not bona
fide Moreover respondents 4 & 5 had at no stage raised the issue before the Revenue
Courts or even before the High Court that the settlement was not bona fide. The High
Court as also respondent No. 1 have both proceeded on the footing that the compromise
was against the statutory provisions of law or that it was not registered although it should
have been registered under the Registration Act.
There is yet one more intrinsic circumstance which shows that the compromise was an
absolutely bona fide transaction. It would appear that at the time of the compromise
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respondent 5 Ram Pyari was faced with a situation when her marriage in 1955 was not so
far proved. If she was absolutely certain that her marriage had taken place in 1955 she
would not have agreed to the terms at all. On the other hand if she thought that she might
not be able to prove that her marriage took place in 1955 and if it was shown that she had
married before 1955 then she would be completely disinherited and would get nothing at
all with the result that the appellant Kale would get the entire property. on the other hand
the appellant must have similarly thought that a bird in hand is worth two in the bush. So
long as Ram Pyari was alive he would not be able to enjoy the property and would have to
wait till her death. It was, therefore, better to take half of the property immediately as a
permanent tenure holder and give the half to the daughters of Lachman, namely, Har
Pyari and Ram Pyari. Thus under the terms of the compromise both the parties got
substantial . benefits and it was on the whole a very fair and equitable bargain. In these
circumstances, therefore, the parties struck a just balance and fair and beneficial
settlement which put an end to their disputes.
Coming to the second plank of attack against the family settlement that it was brought
about by duress or undue influence or fraud, there is not an iota of evidence or a whisper
of an allegation by respondents 4 & 5 either in the Revenue Courts or in the High Court.
Even before respondent No. 1, where respondents 4 & 5 were the petitioners l, they never
questioned the compromise on the ground that it was fraudulent on a point of fact. It is
well settled that allegations of fraud or undue influence must first clearly be pleaded and
then proved by clear and cogent evidence. There was neither pleading nor proof of this
fact by respondent 4 & 5. Moreover, it may be mentioned that even in their objections
before the Assistant Commissioner for setting aside the previous mutation made in favour
of the appellant Kale the only ground taken by the respondents 4 & 5 was that the order
was passed without their knowledge. Lastly the petition filed before the Assistant
Commissioner for mutating the lands in pursuance of the compromise was signed by both
the parties who were major and who knew the consequences thereof. In these
circumstances, therefore, the argument of the learned counsel for the respondents that
the compromise was fraudulent appears to be a pure after-thought and is not at all
justified by any evidence. This contention must therefore be overruled.
It was also suggested by Mr. Sharma that before the Revenue Courts the appellant Kale
tried to show by producing a false Kutumb Register that respondent No. 5 Ram Pyari was
married before 1955 so that being a married daughter she may be deprived of her
inheritance and the Revenue Courts found that this register was not proved to be genuine.
This, however, does not amount to a plea of fraud but is a matter of evidence. On the
other hand even the respondents 4 & 5 had taken the stand before the Revenue Courts
when they filed their joint written statement in 1965 that the appellant was not the
grandson of Lachman a fact which they admitted clearly before the Panchayat Adalt as
also before the Assistant Commissioner when they filed the mutation petition. The
Revenue Courts clearly held that this plea was totally unfounded and was completely
21/31

disproved. thus even assuming the argument of Mr. Sharma to be correct, both parties
being in pari delicto none of them could be allowed to take advantage of their wrong. In
fact Mr. Garg counsel for the appellants was fair enough to give up this plea and clearly
conceded before the High Court as also in this Court that Musamat Ram Pyari was
married in 1955 as found by the Revenue Courts.
Another contention that was advanced before us by counsel for the respondents was that
an oral family arrangement was never pleaded before the Revenue Courts and that the
appellants relied mainly on the mutation petition as embodying the terms and conditions
of the compromise. In our opinion this contention, apart from being untenable, is not
factually correct. The disputes between the appellant Kale and respondents 4 & 5 arose
only after the Naib Tehsildar had, on the application of the appellant, mutated his name in
respect of the Khata Numbers in dispute. An application was filed by respondents 4 & 5
for setting aside that order. Thereafter both the parties, namely, the appellant and
respondents 4 & 5 obtained adjournment from the Court on the ground that they were
going to compromise the dispute. Subsequently the mutation petition was filed which was
signed by both the parties. In the Revenue Courts therefore it was the mutation petition
alone which formed the pleadings of the parties and therefore it was obvious that the
family arrangement was pleaded by the appellant at the first possible opportunity The
family arrangement was again relied upon before the Consolidation officer in Annexure-5
to the writ petition the relevant portion which appears at p. 25 of the Paper Book and runs
thus:

The parties contested the suit in the panchayat. They contested it in tahsil
also. The plaintiff produced a copy thereof. He produced a copy of a
compromise in which the defendant gave half of the land to Kale, treating
him as dheota of Lachman, although no party now remembers about that
compromise."

In the final Revenue Court i.e., before the Director of Consideration as also before the
High Court the compromise was very much relied upon by the appellant and a finding
against the appellant was given both by respondent No. 1 and by the High Court as a
result of which this appeal has been filed before this Court. It was suggested by the
respondents that Respondent No. 1 had merely made a stray observation in his order.
This does not appear to be correct, because respondent No. 1 has proceeded on the
footing that a compromise was there but it could not be given legal effect because it
contravened some provisions of the law. In this connection the order of respondent No. 1
reads thus:
22/31

"Even the orders passed in the mutation proceedings on the basis of


compromise could not maintain as since the mutation proceedings were of
summary nature and the com promise of the parties, even if accepted, was
against the pro visions of law, as either Smt. Ram Pyari could succeed or
Kale alone could be deemed to be the successor of Lachman, the last
male tenant. There was no question of both the parties sharing the land in
between them on the basis of a compromise made against the provisions
of law."

Respondent No. 1 also indicated in his order that the compromise had taken place before
the Naib Tehsildar as alleged by the appellant. Lastly both the Single Judge and the
Division Bench also have proceeded on the basis that there was in fact a compromise
between the parties but have refused to give effect. to the compromise because the same
was not registered. In these circumstances, therefore, the contention of the respondents 4
and 5 on this score must be overruled.
It was then argued that the appellants have adduced no evidence to prove that there was
actually a family arrangement between the parties. We are, however, unable to agree with
thus contention There are four important circumstances from which the family
arrangement can be easily inferred. These are;

(1) that the parties took adjournment from the Court intimating to it that a
compromise was under contemplation;

(2) that a petition for mutation was filed before the Court of Assistant
Commissioner clearly alleging that a com promise or a family arrangement
had already taken place and that mutation should be made accordingly;

(3) that in pursuance of the compromise both the parties A took benefit
under the same and continued to remain in possession of the properties
allotted to them for full seven years and did not raise any objection at any
stage before any authority during this period regarding the validity of the
compromise; and (4) that even though the U.P. Consolidation of Holdings
Act, 1953 contained an express provision for filing of an objection under s.
9 (2) when the proceedings for correction of the entries were taken
respondents 4 & 5 filed no objection whatsoever and filed their additional
written statement at a much later stage.
23/31

Thus from the actings and dealings of the parties in the course of several years a family
arrangement can clearly be inferred in this case.
Finally the respondents never took any objection before any of the Courts that no family
arrangement had as a matter of fact taken place between the parties. The only objection
centered round the admissibility of the document said to have embodied the terms of the
compromise. This contention, therefore, cannot be accepted.
It was then submitted that even the appellant had given a go bye to the compromise and
seems to have forgotten all about it. This is also factually incorrect. As indicated earlier
right from the Court of the Consolidation officer upto the High Court the appellant has
always been relying mainly on the compromise entered into between the parties.
Another argument advanced by counsel for the respondents was that the family
arrangement was not valid because the appellant had absolutely no title to the property so
long as Mst. Ram Pyari was in lawful possession of the property as the sole heir to
Lachman, and if under the family arrangement any title was conveyed to the appellant, the
said conveyance can only be by a registered instrument under the provisions of
the Registration Act and the Transfer of Property Act. This argument also, in our opinion,
suffers from a serious misconception. We have already pointed out that this Court has
widened the concept of an antecedent title by holding that an antecedent title would be
assumed in a person who may not have any title but who has been allotted a particular
property by other party to the family arrangement by relinquishing his claim in favour of
such a done. In such a case the party in whose favour the relinquishment is made would
be assumed to have an antecedent title. In fact a similar argument was advanced before
this Court in Tek Bahadur Bhujil's case, (supra) relying on certain observations made by
Bose, J., in Sahu Madho Das's case, (supra) but the argument was repelled and this
Court observed as follows: -

"Reliance is placed on the following in support of the contention that the


brothers, having no right in the property purchased by the mother's' money,
could not have legally entered into a family arrangement. The observations'
are:

It is well settled that a compromise or family arrangement is based on the


assumption that there is an antecedent title of some sort in the parties and
the agreement acknowledges and defines what that title is, each party
relinquishing all claims to property other than that falling to his share and
recognizing the right of the others, as they had previously asserted it to the
portions allotted to them respectively. "These observations do not mean
that some title must exist as a fact in the persons entering into a family
24/31

arrangement. They simply mean that it is to be assumed that the r parties


to the arrangement had an antecedent title of some sort and that the
agreement clinches and defines what that title is."

The observations of this Court in that case, therefore, afford complete answer to the
argument of the learned counsel for the respondents on this point.
Furthermore the Privy Council in somewhat identical circumstances P upheld the family
settlement in Ramgouda Annagouda & others v. Bhausaheb and others(1). In that case
there were three parties to the settlement of a dispute concerning the property of the
deceased person. These were the widow of the deceased, the brother of the widow and
the son-in-law of the widow. It was obvious, therefore, that in presence of the widow
neither her brother nor her son-in-law could be regarded as the legal heirs of the
deceased. Yet having regard to the near relationship which the brother and the son-in-law
bore to the widow the Privy Council held that the family settlement by which the properties
were divided between these three parties was a valid one. In the instant case also putting
the case of respondents 4 & 5 at the highest, the position is that Lachman died leaving a
grandson and two daughters. Assuming that the grandson had no legal title, so long as
the daughters were there, still as the settlement was made to end the disputes and to
benefit all the near relations of the family, it would be sustained as a valid and binding
family settlement. In the instant case also it would appear that the appellant Kale and Mst.
Har Piari had no subsisting interest in the property so long as Mst. Ram Piari was alive.
Ram Piari in view of the amendment in law by the U.P. Land Reforms (Amendment) Act,
20 of 1954, continued to be an heir even after her marriage but Mst. Har Piari ceased to
be the heir after her marriage which had taken place before the amendment. Nevertheless
the three children of Lachman in order to bring complete harmony to the family and to put
an end to all future disputes decided to divide the property each getting a share in the
same. The appellant Kale got Khatas Nos. 5 & 90 and Mst. Har Pari's share was placed
along with Mst. Ram Piari in the other Khatas. This the appellant and Har Piari & Ram
Piari also enjoyed full benevolence under the family arrangement. We cannot think of a
fairer arrangement than this by which not only the property was divided amongst the
children of Lachman but even the spirit of the law, which wiped out the invidious
distinction between the married and unmarried daughters by the U.P. Act 20 of 1954, was
followed. The facts of the present case, therefore, as we have already indicated, are (1)
L.R. 54 I.A. 396.
on all fours with the facts in Ramgouda Annagouda's case (supra). The Privy Council
further held in Ramgouda Annagouda's case that Ramgouda being a party to benefit by
the transaction was precluded from questioning any part of it. On a parity of reasoning,
therefore, the respondents 4 & 5 who were parties to the family arrangement and having
been benefited thereunder would be precluded from assailing the same. For these
25/31

reasons, therefore, the contention of the learned counsel for the respondents on this point
also must be over- ruled.
We might mention here that the learned counsel for the respondents relied on two
decisions of the Patna High Court in Brahmanath Singh Ors. v. Chandrakali Kuer and
another (1) and Mst. Bibi Aziman and another v. Mst. Saleha and others (2) for the
proposition that unless a party to a settlement had an antecedent title the family
settlement would not be valid. In view, however, of the decisions of this Court and of the
Privy Council the authority of the Patna High Court on this point is considerably weakened
and cannot be treated as a good law. The Patna High Court also held that where the
document itself contains or embodies the terms of the family settlement it will be
compulsorily registrable but not when it speaks of the past. In view of our finding that the
mutation petition before the Assistant Commissioner was merely a memorandum of the
family arrangement, the authority of the Patna High Court does not appear to be of any
assistance to the respondents.
Rebutting the arguments of the learned counsel for the appellant, Mr. Sharma for the
respondents, contended that no question of estoppel would arise in the instant case
inasmuch as if the document was to be compulsorily registrable there can be no estoppel
against the statute. In the first place in view of the fact that the family arrangement was
oral and the mutation petition was merely filed before the Court of the Assistant
Commissioner for information and for mutation in pursuance of the compromise, the
document was not required to be registered, therefore, the principle that there is no
estoppel against the statute does not apply to the present case. Assuming, however, that
the said document was compulsorily registrable the Courts have generally held that a
family arrangement being binding on the parties to it would operate as an estoppel by
preventing the parties after having taken advantage under the arrangement to resile from
the same or try to revoke it. This principle has been established by several decisions of
this Court as also of the Privy Council. In Kanhai Lal v. Brij Lal and Anr.(3) the Privy
Council applied the principle of estoppel to the facts of the case and observed as follows:-

"Kanhai Lal was a party to that compromise. He was one of those whose
claims to the family property, or to shares in it, induced Ram Dei, against
her own interests and those of her daughter, Kirpa, and greatly to her own
detriment, to alter her position by agreeing to the compromise, and under
that compromise he obtained a substantial benefit, which he (1) AIR 1961
Pat. 79. (2) AIR 1963 Pat. 62. (3) L.R. 45 I.A. 118, 124.

has hitherto enjoyed. In their Lordships' opinion he is bound by it, and


cannot now claim as a reversioner.
26/31

This Court in Dhiyan Singh and Anr. v. Jugal Kishore and Anr . (1) observed as follows:

"We do not think the fact that there was a voluntary com promise whereas
here there was the imposed decision of an arbitrator makes any difference
because we are not proceeding on the footing of the award but on the
actions of the parties in accepting it when they need not have done so if
the present contentions. are correct.

Even if the arbitrator was wholly wrong and even if the had no power to
decide as he did, it was open to both sides to accept the decision and by
their acceptance recognise the existence of facts which would in law give
the other an absolute estate in the properties they agreed to divide among
themselves and did divide. That, in our opinion is a representation of an
existing fact or set of facts. Each would consequently be estopped as
against the other and Brijlal in particular would have been estopped from
denying the existence of facts which would give Mst. Mohan Dei an
absolute interest in the suit property."

In view of the principle enunciated in the aforesaid case it is obvious that respondents 4 &
5 would be estopped from denying the existence of the family arrangement or from
questioning its validity.
In Ram Charan Das's case (supra) while dwelling on the point of the family arrangement
this Court observed as follows:

"It seems to us abundantly clear that this document was in substance a


familiar arrangement and, therefore, was binding on all the parties to it.
Moreover it was acted upon by them. x x x x In our opinion the document
on its face appears to effect a compromise of the conflicting claims of
Gopinath on the one hand and the pre sent plaintiff Ram Charan Das and
his brothers on the other to the estate of Kanhaiyalal."

At p. 851 this Court pointed out that as the settlement consisted of recognition of the right
asserted by each other none of the parties could be permitted to impeach it thereafter.
To the same effect is the decision of this Court in Krishna Bihari lal's case (supra), where
the doctrine of estoppel was discussed, and while referring to the previous cases of this
27/31

Court, it was observed as follows:

"In Dhyan Singh's case -[1952] SCR 478-this Court ruled that even if an
award made is invalid, the persons who were parties to that award are
estopped from challenging the (1) [1952] S.C.R. 478.

validity of the award or from going behind the award in a subsequent


litigation. In T. V. R. Subbu Chetty's Family Charities v. M. Raghava
Mudaliar and Ors.-[1961] 3 SCR 624-this Court ruled that if a person
having full knowledge of his rights as a possible reversioner enters into a
transaction which settles his claim as well as the claim of the opponent at
the relevant time, he cannot be permitted to go back on that arrangement
when reversion actually opens. At the time of 1 the compromise
Lakshmichand and Ganeshilal were the near est presumptive reversioners.
They must be deemed to have J known their rights under law. Under the
compromise they purported to give a portion of the suit properties
absolutely to Pattobai, evidently in consideration of her giving up her claim
in respect of the other properties. They cannot be now permitted to resile
from the compromise and claim a right inconsistent with the one embodied
in the compromise." Finally in a recent decision of this Court in S.

Shanmugam Pillai case (supra) after an exhaustive consideration of the authorities on the
subject, it was observed as follows:

"Equitable principles such as estoppel, election, family settlement, etc. are


not mere technical rules of evidence. The have an important purpose to
serve in the administration of justice. The ultimate aim of the law is to
secure justice. In the recent times in order to render justice between the
parties, courts have been liberally relying on those principles. We would
hesitate to narrow down their scope.

As observed by this Court in T. V. R. Subbu Chetty's Family Charities' case


(supra), that if a person having full knowledge of his right as a possible
reversioner enters into a transaction which settles his claim as well as the
claim of the opponents at the relevant time, he cannot be permitted to go
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back on that agreement when reversion actually falls open."

In these circumstances there can be no doubt that even if the family settlement was not
registered it would operate as a complete estoppel against respondents 4 & 5.
Respondent` No. 1 as also the High Court, therefore, committed substantial error of law in
not giving effect to the doctrine of estoppel as spelt out by this Court in so many cases.
The learned counsel for the respondents placed reliance- upon a number of authorities in
Rachcha v. Mt. Mendha,(1) Chief Controlling 6 Revenue Authority v. Smt. Satyawati Sood
and others(2) and some other authorities, which, in our opinion have no bearing on the
issues to be decided in this case and it is therefore not necessary for us to refer to the
same Finally it was contended by the respondents that this Court should not interfere
because there was no error of law in the judgment of the High Court or that of
Respondent No.
1. This argument is only stat- ed to be rejected.
(1) AIR 1947 All. 177. (2) AIR 1972 Delhi 171.
In view of our finding that the family settlement did not contravene any provision of the law
but was a legally valid and binding settlement in accordance with the law, the view of
Respondent No. 1 that it was against the provisions of the law was clearly wrong on a
point of law and could not be sustained. Similarly the view of the High Court that the
compromise required registration was also wrong in view of the clear fact that the
mutation petition filed before the Assistant Commissioner did not embody the terms of the
family arrangement but was merely in the nature of a memorandum meant for the
information of the Court. The High Court further in law in not giving effect to the doctrine of
estoppel which is always applied whenever any party to the valid family settlement tries to
assail i The High Court further erred in not considering the fact that even if the family
arrangement was not registered it could be used for a collateral purpose, namely, for the
purpose of showing the nature and character o possession of the parties in pursuance of
the family settlement and a o for the purpose of applying the rule of estoppel which
followed from the conduct of the parties who having taken benefit under the settlement
keep their mouths shut for full seven years and later try to resile from the settlement. In
Shyam Sunder and others v. Siya Ram and another (1) it was clearly held by the
Allahabad High Court that the compromise could have been taken into consideration as a
piece of evidence even if it was not registered or for that matter as an evidence of an
antecedent title. The High Court observed as follows:

"The decision in Ram Gopal v. Tulshi Ram,-AIR 1928 All. 641 (FB)-is clear
that such a recital can be relied upon as a piece of evidence.
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It is clear, therefore, that the compromise can be taken into consideration


as a piece of evidence. x x x To sum up, therefore, we are of the view that
the compromise could have been relied upon as an admission of
antecedent title."

On a careful consideration of the facts and the circumstances and the law discussed
above, we are clearly of the opinion that-the orders of the High Court as also that of
Respondent No. 1 suffer from a substantial error of law resulting in serious injustice to the
appellant by re- opening a dispute which had been settled almost seven to eight years
before the proceedings for re-opening the same were started. In not interfering to correct
the clear error of law committed by Respondent No. 1, the High Court failed to exercise
jurisdiction vested in it by law, and, therefore, the order of the High Court itself was legally
erroneous and cannot be sustained. The contentions raised by the appellant are well
founded and must prevail, while the contentions advanced by the respondent fail.
In these circumstances, therefore, the appeal is allowed, the judgment of the High Court is
set aside and by a writ of certiorari the order of Respondent No. 1 dated January 22, 1965
is hereby quashed. The (1) AIR 1973 All. 382, 389.
order of the Settlement officer dated November 28, 1964 which actually gave effect to the
compromise is hereby restored and the Revenue authorities are directed to attest the
mutation in the names of the appellant and respondents 4 & 5 in accordance with the
family arrangement entered into between the parties referred to in this case. In the
peculiar circumstances of the case there will be no order as to costs.
SARKARIA J. I am at one with my learned Brother, that this appeal should be allowed with
no order as to costs and that the order dated January 22, 1965 of Respondent 1 quashed,
the order dated November 28, 1964 of the Settlement officer restored, and the Revenue
authorities directed to attest the mutation in accordance with the antecedent family
arrangement which had been orally arrived at between the parties and acted upon for
several years. I further agree that the family settlement arrived at by the parties was oral,
and the petition filed by them on August 7, 1956 before the Assistant Commissioner was
merely an information of an already completed oral transaction. In other words, the
petition was only an intimation to the Revenue court or authority that the matters in
dispute between the parties had been settled amicably between the members of the
family and no longer required determination and that the mutation be effected in
accordance with that antecedent family settlement. Since the petition did not itself create
or declare any rights in immovable property of the value of Rs. 100 or upwards, it was not
hit by s. 17(1)(b) of the Registration Act, and as such was not compulsorily registrable.
The rest of the reasoning in the judgment of my learned Brother has also my concurrence
except that I will reserve my opinion with regard to the alternative proposition, whether this
petition-assuming it was compulsorily registrable under s. 17(1) (b) of the Registration Act30/31

could be used to raise an estoppel against any of the parties hereto. Decision of this point,
in my opinion, is unnecessary for the disposal of this case.
P.B.R.

Appeal allowed.

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